What’s the Real Value of Your Employee Benefits?

Approximately 30% or more of the median job’s pay is made up of benefits, according to the U.S. Bureau of Labor Statistics. But it’s not always simple to determine how much your employee benefits are worth.

To learn how much your business contributes to health insurance, retirement programs, and other employee benefits, you might need to do a little research. Some advantages also have non-financial worth. And different persons may place different values on the same advantages.

People with health issues, for instance, are likely to value having access to a disability or life insurance that could otherwise be difficult to obtain or prohibitively expensive. A program to help with college debt may be more valuable to someone with student loan debt than to someone without.

Reviewing your employer’s current offers is a wonderful idea. All since open enrollment season has arrived once again. Knowing how much your perks are worth could inspire you to stay at your current work longer. Or maybe convince you that it’s time to look for a better opportunity. You can more clearly determine how much more money you’ll need to make to replace your current benefits if you’re considering going self-employed.

These are some of the most popular employee benefits and typical employer contribution amounts.

Your Health Insurance: $5,000 to $20,000

Health insurance policies offered by employers might be quite expensive or very basic. Employers paid on average 83% of the $7,739 single coverage cost and 73% of the $22,221 family coverage premium in 2017.

So that you can see the amount that both you and your employer spent on your health insurance last year on your 2021 W-2. A “DD” code is frequently used when reporting the annual amount.

Your pay stub may also list your employer’s contribution in detail. Your gross and after-tax income as well as different deductions are listed in your pay stub. Ask your company’s human resources department for further information on how you may frequently access your pay stub through the online payroll system.

Of course, premiums are only one consideration when assessing your health insurance. It’s important to consider deductibles, co-pays, and provider networks. Access to a variety of plans can make open enrollment more difficult. But it can also allow you to customize your coverage to your needs.

Pension Savings Strategy: 3–10% Of Your Salary

Access to a retirement plan is the benefit that employees value most after health insurance, with all other benefits ranking “a distant third”.

People with workplace retirement plans like 401(k)s are far more likely to save for retirement than those without. These programs provide automatic payroll deductions, and many also sign people up for them automatically.

Most 401(k)s also include business matches. Which are free funds that can speed up an employee’s financial development. One of the most popular matches is a dollar-for-dollar match of 3% to 6% of pay, or 50% of the first 6% of the salary that the employee contributes.

Traditional pension plans, which guarantee a specific monthly benefit amount in retirement, allow employers to contribute an even higher percentage of wages. In contrast, the retirement benefits you receive under 401(k) and other defined contribution plans are determined by the number of contributions you make. As well as the performance of your investments.

Government organizations, colleges, and healthcare NGOs still frequently offer pensions. Even though only 15% of employees in the private sector have access to them, according to the Bureau of Labor Statistics.

Other Things to Think About

Companies that offer dental insurance often pay $500 to $2,500 a year for the coverage. Employees typically pay between $100 and $300 for a life insurance policy. And between $250 and $1,500 for every disability policy.

Employers may provide access to supplementary insurance, including pet insurance, long-term care insurance, and additional life insurance.

Aid for educational expenses is also becoming more and more common. According to the Society for Human Resource Management, around half of companies provide financial aid for education. Additionally, of the businesses questioned by EBRI the previous year, 17% provided some sort of student loan debt relief, and another 31% planned to.

According to the IRS, employees can deduct up to $5,250 in tuition assistance from their income on their tax returns. Additionally, the cap covers assistance with student loan repayment through 2025.

If you want to learn more, contact us right away.